This week I attended a three day ‘Corporate Climate Response’ conference in London, UK. Topics included why organisations should consider using carbon offsetting as apart of their business strategy – out of principled concern for the environment, to achieve a competitive edge by being seen as a caring organisation, or to gain experience in a voluntary market prior to mandatory offsetting being introduced.
The Coffee House believes that any organisation that is committed to addressing climate change needs as a matter of priority, adopt a strategy that focuses firstly on its own direct emissions, and reducing its carbon footprint using all cost effective measures available. It should then target indirect emissions by engaging with its supply chain, supporting low-carbon suppliers and encouraging them to pursue further and continuing reductions wherever economically possible. Finally, it should consider the applicability of ‘carbon offsetting’, which allows organisations to indirectly achieve additional reductions of their carbon footprint by purchasing carbon credits associated with emissions reduction projects, typically in developing countries.
At the conference, Rob Challis, Global Head of Corporate Responsibility for the Man Group – an international financial services organisation, outlined how his organisation had used an emissions reduction strategy similar to the one I outlined above. Its implementation has meant no net increase in their carbon footprint, despite significant growth in the organisation since the scheme was introduced. Part of their reductions have come from a carbon offset project in India – the Malavalli Power Plant, which utilises low density crop residues (which would otherwise burnt on the fields) for the generation of eco-friendly green power. Electricity for 47 villages would otherwise be supplied from a power generating mix primarily dependant on coal. Over a 7 year period this scheme is expected to have saved 144,840 tonnes of CO2 emissions, created 450 jobs in collecting and supplying the crop residues, and a further 200 jobs in the production of organic fertiliser that includes the power plant waste that can then be applied back onto the land.
The Man Group’s participation in the Malavalli Power Plant scheme was facilitated by Pure, a charity that ensures that offsetting schemes sourced for its clients (corporations or individuals) comply with the clean development mechanism (CDM) within the Kyoto Protocol. This is one of a number of initiatives aimed at providing standards against which schemes can be evaluated to ensure that claims of GHG reductions, sustainable practice and socioeconomic benefit are real and verifiable. Information about the project and its performance in relation to carbon emissions reductions is readily available in the public domain; however, on a less positive note, I could find no data on the socioeconomic impacts of the scheme, a key plank in the CDM approach.
With both mandatory and voluntary offsetting account for redutions equal to only 0.5% of our current carbon emissions (but expected to reach 5% by 2010), it is unfortunate that ‘Gold Standard’ offsetting schemes like this one make up less that 1% of the emissions reductions schemes undertaken to-date.